KONE Corporation (”KONE”) has submitted an offer to the Ministry of Trade and Industry to acquire the shares in Partek Corporation (“Partek”) held by the Republic of Finland (“State”).
The offer’s conditions are preliminarily considered by the State to be acceptable. The parties are continuing to negotiate contractual details. The transaction requires final approval by the government of Finland.
KONE has offered to acquire all Partek shares held by the State and will submit a conditional public tender offer for the rest of Partek’s outstanding shares. The transaction requires the approval of the final contract by the government and KONE’s board of directors. In addition, the transaction requires competition authority approval.
In the proposed transaction, KONE will acquire the 14,721,835 Partek shares held by the State, which represent approximately 30.2% of the share capital and votes in Partek. The purchase price is EUR 15.30 per share, making the total purchase price for the shares approximately EUR 225 million. The per share purchase price exceeds the closing price on Friday, 17 May, 2002, by approximately 25% and the latest 12 month volume-weighted average share price by approximately 45%.
After the consummation of the transaction between KONE and the State, KONE will publish a conditional public tender offer to the remaining Partek shareholders to purchase all outstanding shares for cash. The consideration offered shall be EUR 15.30 per share. The offer will be conditional, among other things, on KONE’s obtaining over 90% of the shares and votes in Partek. KONE has available facilities to finance the acquisition of the Partek shares.
As part of the transaction between KONE and the State, it is possible that the parties shall agree on a targeted share issue in which the State will subscribe 1,000,000 class B KONE shares with a nominal value of EUR 3 per share. The subscription price for the State in the targeted share issue will be EUR 106 per share. The targeted share issue requires approval by an extraordinary shareholders’ meeting to be called at a later date.
KONE’s board of directors has proposed a splitting of KONE shares to the extraordinary shareholders’ meeting convened for 24 May, 2002. If the proposal is approved in the shareholders’ meeting, the above-mentioned share issue will consist of 3,000,000 class B KONE shares with a nominal value of EUR 1 per share, and the subscription price for the share issue will total EUR 106 million. If the State subscribes shares in the targeted share offering, its holding in KONE will amount to 4.7% of the share capital and 1.9% of the votes.
The intention is to create an industrial and service company of Finnish origin with significant size, strong global market positions in its businesses and excellent opportunities for profitable growth. KONE’s aim is the long-term development of Partek in accordance with Partek’s communicated strategy by utilizing the financial strength and global industrial expertise of the combined entity. The value of the new entity’s combined sales in 2001 totaled approximately EUR 5.6 billion, and cash flow from operations exceeded EUR 400 million. The combined entity will be one of the largest industrial engineering companies in the Nordic region. Combined personnel in 2001 totaled approximately 35,400, of which some 6,000 were located in Finland. The current business activities of the combined entity will continue to be carried out by separate KONE and Partek organizations.
Director, Secretary to the Board of Directors
Vice President, Corporate Communications
For further information, plese contact:
The following information briefings will be held Monday, 5 May, 2002 at KONE Corporate Offices at the following address:
Press Conference - 1:00 p.m.
Phone Conference for Analysts - 3:30 p.m. at + 358-800-173 587
Presentation material will be available at www.kone.com from 1:00 p.m. Finnish time.